AMD stock closes at highest price in over a decade after best earnings in 7 years

  • Written by MarketWatch
  • Published in Economics

A previous version misidentified AMD’s Epyc chip as a graphics processing unit, or GPU. It is a central processing unit, or CPU.

image Advanced Micro Devices Inc.
AMD CEO Lisa Su shows the company's Ryzen chip for desktops and gaming PCs.

Advanced Micro Devices Inc. shares soared Thursday to close at their highest price in over a decade, a day after the chip maker’s quarterly results topped Wall Street estimates on strong revenue gains and its best earnings in seven years.

AMD AMD, +14.33%[1]  shares rallied 14% to close Thursday at $18.35, its highest close since January 2007, according to FactSet data. It was also the stock’s best one-day percentage gain since Feb. 2, 2017.

Shares are up nearly 79% on the year, compared with a 6.1% advance on S&P 500 index SPX, -0.30%[2]  and a 13.7% gain in the tech-heavy Nasdaq Composite Index COMP, -1.01%[3]

“We had an outstanding second quarter with strong revenue growth, margin expansion and our highest quarterly net income in seven years,” President and Chief Executive Lisa Su said in a statement.

One area of quick growth has been with the company’s Epyc data-center central processing unit (CPU) which has been out for a year. On a conference call, Su said there was no question that data-center sales of Epyc were growing very quickly even though the size of the business now is still small. The CEO said AMD plans to re-invest “heavily” in the business to grow it out over the next four to eight quarters.

Recently, AMD’s Epyc chip was adopted by Cisco Systems Inc.[4] CSCO, +0.86%[5]  and Hewlett Packard Enterprise Co.[6] HPE, +1.36%[7]  for their makes of servers.

But what’s growing even faster than demand for CPUs is demand for graphics processing units, or GPUs, Su said.

“There’s no question that the demand for GPUs in the data center are growing very quickly,” Su said on the call. “Our focus on the GPU side is very cloud-centric.” Su added that interest is high for AMD’s 7nm Vega GPU that’s coming out later this year....

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